S&P downgrades Dynegy

Standard & Poor's said it lowered to D from CC the corporate credit rating and unsecured debt ratings on Dynegy Holdings LLC, as well as the ratings on the pass-through certificates at Dynegy Danskammer LLC and Dynegy Roseton LLC following the bankruptcy filing by Dynegy Holdings on Nov. 7.

The corporate credit rating on Dynegy Inc. remains unchanged at CC since Dynegy was not filed into bankruptcy and remains current on all of its obligations, S&P said.

The agency said it removed Dynegy from CreditWatch, but have assigned it a negative outlook, reflecting the risk that the bankruptcy process may still result in a bankruptcy filing for Dynegy.

The agency also said it affirmed the CCC+ corporate credit rating and B issue rating on the $1.1 billion senior secured term loan B at Dynegy Power LLC, but the outlook on the ratings was revised to negative from stable.

The 4 recovery rating on Dynegy Holding's $3.4 billion senior unsecured notes remains unchanged, reflecting 30% to 50% expected recovery in a default.

The 1 recovery rating on the term loan at Dynegy Power also was affirmed, indicating 90% to 100% expected recovery in a default.

These recovery ratings are not based upon the proposed restructuring plan filed along with the bankruptcy filing. The ratings reflect conservative estimates of recovery based on a discrete asset valuation of Dynegy's portfolio and all obligations as they existed just prior to the bankruptcy filing, S&P said.

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